China’s latest target: Australian coal imports

Australia is demanding answers after reports China has a new tactic in its ongoing trade war that could be hugely damaging Down Under.

Australia is demanding answers from Beijing after reports Chinese customs authorities have been telling companies to stop importing Australian coal.

Trade tensions between the two nations flared again in recent months after China launched an investigation into Australia wine imports.

But coal appears to be the latest on Beijing’s hit list with industry media reporting that officials issued verbal warnings to companies to halt buying thermal coal from Australia.

Trade Minister Simon Birmingham on Tuesday said the Government had contacted China through diplomatic channels overnight.

“I have had discussions with the Australian industry and we are making approaches to Chinese authorities in relation to that speculation,” Senator Birmingham told Sky News.

“We don’t have proof that this is occurring, but as I said, we are taking the accusations at a value where we are at least engaging with the Chinese system.”

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Trade Minister Simon Birmingham says he is working with Australian industry to try to safeguard Australian jobs. Picture: NCA NewsWire / Gary Ramage

Senator Birmingham said there had been a pattern of disruptions to the flow of Australian coal into China in recent years.

“But the market has then recovered as a result of a range of different factors including the application of some domestic quotas it seems in the Chinese system,” he said.

“From Australia’s perspective, the door remains open and the invitation there for us to have the type of discussion that we should as partners in relation to our economic co-operation in this region.

“We are always ready to have that mature dialogue and engagement even on difficult issues on which we may not agree.”

Prime Minister Scott Morrison was also asked about the trade tensions during his tour of Queensland.

“They do have their own coal industry and it is not uncommon that from time to time the Chinese Government will have domestic quotas to support local production and local jobs,” Mr Morrison said.

“That is not a new thing.

“I can only assume based on our relationship and based on the discussions we have with the Chinese government that that is just part of their … process.”

Prime Minister Scott Morrison has been touring Queensland and spruiking the federal budget ahead of the October 31 state election. (Photo by Darren England – Pool/Getty Images)

National Party Senator Matt Canavan said Australian exported about 20 per cent of its coal to China.

“It’s a sizeable market but it’s not our biggest market,” he told Sky News, adding the largest market for thermal coal was Japan.

“We only actually produce about 5 per cent of the world’s coal, so if China decides to buy its coal from different countries, well, those other countries will be exporting less coal and we’ll fill a market gap in those places.

“Obviously, we would like to see as many markets remain open to Australia.”

Chinese Foreign Ministry spokesman Zhao Lijian said he was not aware of Chinese customs authorities telling factories to stop importing Australian coal.

WA Premier Mark McGowan says Australia needs to retain good relations with its trading partners. Picture: Trevor Collens/The West Australian

Meanwhile, WA Premier Mark McGowan used his speech at the annual Diggers and Dealers mining conference on Monday to call for Australia to retain strong relationships with its trading partners.

He questioned whether it was in the country’s interest for it “to be reckless with trading relationships that fund the nation”.

“It’s about acting diplomatically. We need to get on with our major trading partners, whether it’s Japan, Korea or China,” he said.

“WA sells around $100 billion of products to China each year. We buy about $4 billion of products from China.

“It’s a $96 billion trade surplus, I think probably unprecedented in the world.

“Australia needs to have a good relationship with China. It’s not beyond us as Australians to do that.

“In these difficult and uncertain times, it’s essential to keep trade relationships strong rather than letting them fall victims to disputes.”